Placeholder canvas

New Tax for buying jewellery above ₹ 2 lakhs in cash

Date:

New Delhi: Cash purchases of jewellery will attract 1% TCS (tax collected at source) from April 1 if the amount exceeds Rs. 2 lakh, as against the current threshold of Rs. 5 lakh.

Once the Finance Bill 2017 is passed, jewellery will be treated on par with general goods which attract 1% TCS on cash purchase of above Rs. 2 lakh.

The Bill seeks to do away with the threshold of Rs. 5 lakh on jewellery purchases for applicability of TCS because the Union Budget 2017—18 has proposed to ban cash dealings of over Rs. 3 lakh and make violations punishable with a penalty of an equivalent amount to be paid by person receiving the cash.

However, as there is no special provision for TCS on its purchase, jewellery is now being clubbed in general ‘goods’ on which 1% TCS is triggered if a single transaction exceeds Rs. 2 lakh in cash.

ALSO READ: Ironman becomes ‘The Ultraman’; Milind Soman completes 517 km marathon in three days

In a bid to check generation of black money through large transactions, after the Budget proposal to scrap the previous threshold of Rs. 5 lakh is approved by Parliament

“The Income—tax Act provides for 1 per cent TCS on cash purchase of goods or services above Rs. 2 lakh. The definition of goods also includes jewellery and hence 1 per cent TCS would be applicable on jewellery purchased above Rs. 2 lakh in cash,” an official said.

With this move, the TCS threshold for jewellery will be brought at par with that of bullion from April 1.

The Income Tax Department has been levying 1 per cent TCS on cash purchase of bullion in excess of Rs. 2 lakh and jewellery in excess of Rs. 5 lakh since July 1, 2012.

ALSO READ: ‘Trust vote won by Chief Minister E Palaniswami Illegal,’ DMK claims in Court

However, the Budget for 2016—17 had imposed TCS of 1% on goods and services purchased in cash over Rs. 2 lakh.

The Finance Bill 2017 states that current provisions provide for “tax collection at source at the rate of one per cent of sale consideration on cash sale of jewellery exceeding Rs. five lakh. It is proposed to omit the said clause in view of restriction on cash transactions as proposed to be provided”.

Currently, Section 206C sub section (1D) of Income Tax Act, 1961 provides for a seller collecting from the buyer 1 per cent of sale consideration as income tax if the amount paid for bullion exceeds Rs. 2 lakh in cash and for jewellery if it exceeds Rs. 5 lakh in cash.

ALSO READ: IPL auction 2017: Pune Supergiants break it’s bank to buy Ben Stokes for whopping Rs 14.50 Cr

The same section also provides for 1 per cent TCS on cash paid in excess of Rs. 2 lakh for any goods other then bullion and jewellery.

With the amendment proposed in the Finance Bill 2017, jewellery purchase of over Rs. 5 lakh in cash is being omitted from the ambit of TCS but will now be classified as “other goods” and the 1 per cent levy be provided if cash consideration is over Rs. 2 lakh.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Share post:

Subscribe

Popular

More like this
Related

To Browbeat And Bully Others Is Vintage Congress Culture: PM Modi After 600 Lawyers Write CJI

New Delhi: In response to the voiced apprehensions of...

Allu Arjun’s ‘Pushpa’ Saga: Trilogy Confirmed with ‘The Roar’ Title

As the dust settles from the electrifying release of...

IPL 2024: Delhi Capitals Win Toss, Opt to Bowl First Against Rajasthan Royals

Jaipur: Delhi Capitals (DC) skipper Rishabh Pant won the...

Unwarranted, Unacceptable: India On US Remarks On Kejriwal Arrest, Cong’s Frozen Accounts

The MEA during the weekly presser said that India lodged strong objections and protests with a senior official from the US Embassy about comments made by the State Department